The United States has officially launched one of its largest foreign investment partnerships in recent years. President Donald Trump announced that a sweeping $550 billion trade and investment agreement with Japan has formally begun, marking a significant expansion of economic ties between the two nations.
As part of the first phase, Japan will invest $36 billion in energy and critical minerals projects across Texas, Georgia and Ohio. The White House described the agreement as a strategic push to strengthen American manufacturing, energy security and industrial capacity.
US-Japan Trade Deal: What is the $550 Billion?
The agreement represents a long-term investment pledge by Japan to channel $550 billion into the US economy. In return, the United States reduced tariffs on Japanese imports to 15%, easing previous trade tensions.
Trump framed the deal as a major victory for his trade policies. Posting on Truth Social, he wrote, “Our MASSIVE Trade Deal with Japan has just launched!”
“Japan is now officially, and financially, moving forward with the FIRST set of Investments under its $550 BILLION Commitment to invest in the United States of America,” Trump said, calling it part of a “Historic Trade Deal to REVITALIZE the American Industrial Base”.
The announcement came ahead of Japanese Prime Minister Sanae Takaichi’s visit to Washington, signalling stronger economic cooperation between the two allies.
US-Japan Trade Deal: $36 Billion Energy & Infrastructure Projects
The first wave of investments focuses on three major projects:
- An oil export facility in Texas
- A critical minerals processing plant in Georgia
- A natural gas-fired power plant in Ohio
US Commerce Secretary Howard Lutnick said the Ohio facility alone will cost $33 billion and become the largest natural gas-fired generating plant in US history. The plant will generate 9.2 gigawatts of electricity annually, enough to power all homes in Ohio.
A subsidiary of SoftBank Group will operate the Ohio power plant. Officials say the project will help meet the rising electricity demand, especially from AI-driven data centres and advanced technology infrastructure.
The Georgia plant will focus on processing critical minerals used in defence systems, electric vehicles and electronics. At the same time, the Texas oil export facility will strengthen America’s position as a global energy supplier.
US-Japan Trade Deal: How Does the Deal Aim to Boost American Jobs & Industry?
Trump described the agreement as central to rebuilding the US industrial base. He said the projects will create “HUNDREDS OF THOUSANDS of GREAT American Jobs” across construction, manufacturing and energy sectors.
“The scale of these projects is so large, and could not be done without one very special word, TARIFFS,” he wrote, crediting his tariff strategy for encouraging foreign investment into the US.
“America is building again. America is producing again. And America is WINNING again,” Trump added. The administration believes the investment will stimulate local economies, improve supply chains and expand long-term industrial output.
US-Japan Trade Deal: Why Energy & Critical Minerals Matter?
The deal strongly focuses on energy generation and mineral processing because both areas are vital for national security and economic growth. The rapid expansion of artificial intelligence, electric vehicles and high-tech manufacturing has sharply increased demand for electricity and rare minerals.
By expanding domestic power generation and mineral processing capacity, the US aims to reduce dependence on foreign supply chains and ensure stable access to key resources. Officials see the Ohio power plant as especially important, as electricity demand continues to surge due to AI data centres across the country.
What Does This Mean for US-Japan Relations?
The launch of the trade deal signals deepening strategic ties between Washington and Tokyo. Both governments have positioned the agreement as a long-term partnership designed to enhance economic resilience and security cooperation.
The White House described it as a strategic move to revitalise domestic manufacturing while strengthening alliances in the Indo-Pacific region. “This is a very exciting and HISTORIC time for the United States of America and Japan,” Trump said.
If the full $550 billion investment materialises as planned, it could rank among the largest foreign investment commitments in US history. The coming months will determine how quickly projects move from announcement to execution, but the launch itself marks a significant moment in US-Japan economic relations.
